M/S GVK POWER AND INFRASTRUCTURE LIMITED, REP. BY ITS DIRECTOR MR. S. BHUPAL & 2 ORS. Vs. THE DISTRICT REGISTRAR OF ASSURANCES, RED HILLS, HYDERABAD & 2 ORS.

JUDGEMENT

(1.) The second petitioner company filed a Company Petition No. 64 of 2007 under Sections 391 and 394 of the Companies Act, 1956, seeking sanction and confirmation of the scheme of arrangement as consented by the shareholders of the first petitioner company. This Court, by order dated 20.07.2007, sanctioned the scheme of arrangement. It is also stated that the scheme of arrangement was sanctioned by the High Court of Delhi in Company Petition No. 123 of 2007 dated 03.09.2007. While so, the first respondent issued a notice dated 02.11.2007 to the first petitioner company stating that he is liable to pay a stamp duty of Rs.1,47,28,890.00 at 2% of the value of shares involved in the scheme of arrangement under Art. 20(d) of Schedule I-A of the Indian Stamp Act. The first petitioner submitted a reply on 27.11.2007 stating that the scheme of arrangement does not involve any transfer of shares, but only an exchange of shares. The first respondent vide his letter dated 17.12.2007 informed the petitioners that the explanation submitted by them on 24.11.2007 is not acceptable and they were asked to pay requisite stamp duty on or before 31.12.2007. A remainder was issued on 08.01.2008. Again a reply was submitted by the petitioners. In spite of the same, when the first respondent issued a notice on 04.02.2008, the present Writ Petition was filed challenging the same.

(2.) Learned counsel for the petitioners submits that the scheme of arrangement does not come within the definition of amalgamation or merger as there was no fresh allotment of shares consequent to the merger of company, and the two companies remained as it is. He further submitted that there are different situations contemplated under Sections 391 and 394 of the Companies Act, but the legislature wanted to collect stamp duty in respect of the market value involved in the transfer of shares covered by amalgamation and merger under Sec. 394 of the Companies Act.

(3.) Learned Government Pleader appearing on behalf of learned Advocate-General submitted that the value of the shares involved in exchange can be independently subjected to stamp duty without there being a case of amalgamation or merger.